Note EHT Annual Returns are printed with account-specific information for each employer.  Since the ministry's high-speed processing equipment is unable to read reproduced, downloaded or generic returns, we request that employers contact the Ministry so that we may issue a new return with your pre-printed information. For a list of Ministry of Revenue tax offices, please check the blue pages of your telephone directory.

2004 EHT Annual Return Guide for preparing the 2004 Annual Return due March 15, 2005. This Guide can also be used for completing the 2001 to 2003 EHT Annual Returns.

Due: March 15, 2005

Things to Remember

• Financial institutions are not authorized to accept or process Annual, Special or Final Returns.
• Ensure that your Annual Return is received by the Ministry of Revenue by March 15, 2005 to avoid a late filing penalty and interest charges.
• Complete both parts of the Annual Return and do not separate the bottom portion (Payment Advice) from the top (Annual Return).
• All associated employers must complete "Schedule 2- Associated Employers Exemption Allocation".

Who Needs to File an Annual Return?

• All employers who were mailed 2004 EHT Annual Returns.
• Employers who are not eligible for the exemption.
• Eligible employers whose "Total Ontario Remuneration" is greater than their exemption amount for 2004.
• Eligible employers whose "Total Ontario Remuneration" does not exceed their exemption amount for 2004 if the
  employers:
  
  i. were members of an associated group on December 31, 2004; OR
  ii. have remitted EHT instalments in 2004 (the filing of the Annual Return will allow the Ministry to update its files
  and to issue a refund).

Filing Your Annual Return

• Use only original Annual Return forms supplied by the Ministry of Revenue. Additional forms are available from any
  Ontario Ministry of Revenue tax office.
• Verify the pre-printed name and address on the top portion of the form. If changes are required, please call any
  Ontario Ministry of Revenue tax office.

Special and Final Returns

• Employers who pay all of their "Gross Total Ontario Remuneration" in one month of a calendar year are
  required to file a Special Return within 15 days following the month in which the remuneration was paid.
• An employer who ceases to have employees or a permanent establishment in Ontario, or who has amalgamated, should advise the Ministry of Revenue and file a Final Return, within 40 days of the business closure date.

How To Complete Your EHT Annual Return

Line numbers below refer to the line numbers on the Annual Return.

Employer Type Mark an "X" in either the "Yes" or "No" box to indicate your employer type as of December 31, 2004. All three sections must be completed. If any section is incomplete, you will NOT be considered to be eligible for the tax exemption.

Employment Income

Enter the Ontario portion of Employment Income from box 14 of your federal T4 Summary on this line, rounded to the nearest dollar. All employers must complete this section.

EHT Calculation

Line 1: Gross Total Ontario Remuneration

Enter "Gross Total Ontario Remuneration" for all employees from January 1, 2004 to December 31, 2004, rounded to the nearest dollar. Do not include cents.

Line 2: Exemption
Non-eligible employers:
Enter "0" on line 2 and proceed with the completion of your Annual Return.
Eligible employers who are not associated:
Enter "400,000" if you were an eligible, single account employer for the full year. An eligible employer for only part of the year (including the first or last year of business in Ontario, the year of bankruptcy, amalgamation or change in eligibility status), must prorate the exemption. Multiply $400,000 by the number of days in the calendar year that you had both a permanent establishment in Ontario and "Total Ontario Remuneration", and divide the product by 365.

A multiple accounts employer must designate one account to complete and submit "Schedule 1 – Multiple Accounts", which is found on the reverse of the Annual Return. Instructions for completing Schedule 1 are found on page 3 of this guide. Each account must file a separate Annual Return and enter the amount of the exemption allocated to it from column C of Schedule 1.

Eligible employers who are associated:
Complete "Schedule 2 – Associated Employers Exemption Allocation" (enclosed). Schedule 2 is used to calculate and allocate the exemption available to the associated group for the year. Instructions for completing Schedule 2 are found on page 3 of this guide.

Line 3: Taxable Total Ontario Remuneration
Subtract line 2 from line 1 to determine your "Taxable Total Ontario Remuneration". If the result is negative, enter "0" on this line as you do not owe any EHT for 2004.

Certify and return your 2004 EHT Annual Return in the preaddressed envelope to confirm your filing status.

Line 4: Tax Rate

If you are a single account employer, the tax rate is based on line 1 . If you are a multiple accounts employer, use the tax rate applicable to the sum of the "Gross Total Ontario Remuneration" for all of your EHT accounts.

Using the following table, enter the applicable tax rate.

Gross Total Ontario Remuneration	Tax Rate
Up to $200,000	0.98%
$200,001 to $230,000	1.101%
$230,001 to $260,000	1.223%
$260,001 to $290,000	1.344%
$290,001 to $320,000	1.465%
$320,001 to $350,000	1.586%
$350,001 to $380,000	1.708%
$380,001 to $400,000	1.829%
Over $400,000	1.95%

Line 5: Total Tax Payable
Multiply line 3 by line 4 and enter the result on line 5 .

Line 6: Tax Payments made within the Tax Year

Enter the total of all tax payments (excluding interest and penalties) that you made for the year beginning with the payment due on January 15, 2004 and ending with the payment due on December 15, 2004. Include in your calculation any credit amount that has been used to reduce a payment during the year.

Note Any request for information regarding your total tax payments or adjustments for the year must be made in writing.

Line 7: Balance Due/Refund
Subtract line 6 from line 5 and enter the result on line 7 . A positive amount indicates there is a balance owing; a negative amount indicates an overpayment which may be credited to the current year or refunded.

How To Complete Your EHT Annual Return

Line numbers below refer to the line numbers on the Annual Return.

Payment Enclosed, Credit to Current Year, or Refund

Mark the appropriate box with an "X". If the balance is NIL, leave the boxes blank.

Payment Enclosed: Complete the Payment Advice - EHT Annual Return section and enclose a cheque or money order in Canadian funds, payable to the Minister of Finance. Please write your EHT account number on the back of the cheque. Do not send cash.

Credit to Current Year: Mark this box if the overpayment is to be applied to 2005.

Refund: Mark this box if a refund cheque is to be issued.

Certification

This section must be completed and signed by the employer, an authorized officer of the employer, or a third party (e.g., payroll service agency) holding a proxy.

The proxy is not to be sent with the Annual Return, but it must be available if requested by the ministry.

Schedule 1 - Multiple Accounts

This schedule, found on the reverse of the Annual Return, must be completed by multiple accounts employers and submitted with the Annual Return of one of the accounts designated by the employer.

COLUMN A: Enter all account numbers of the multiple accounts employer.
COLUMN B: Enter the 2004 "Gross Total Ontario Remuneration" for each account.
COLUMN C: Enter the exemption amount allocated to each account. A multiple accounts employer may allocate the exemption to any of its multiple accounts to the extent that the sum of the amounts does not exceed the employer's allowable exemption.

A multiple accounts employer that is associated must take its total allowable exemption amount from column E of Schedule 2.

Each account will enter its "Allocated Exemption Amount" from column C of Schedule 1 on line 2 of its Annual Return.

COLUMN D: Subtract the amount in column C from the corresponding amount in column B.

Schedule 2 - Associated Employers Exemption Allocation

COLUMN A: Enter the EHT account number (or legal name if there is no EHT account number) for each of the associated employers within the group, with permanent establishments in Ontario. An associated employer with multiple accounts should enter only the EHT account number designated by the employer to complete and submit "Schedule 1 – Multiple Accounts".

Note multiple accounts are treated as one EHT account on Schedule 2.

The associated group includes all employers associated on December 31 and all employers who were associated during the year, but ceased to have "Total Ontario Remuneration" and/or a permanent establishment in Ontario, during the year.

COLUMN B: Enter the 2004 "Gross Total Ontario Remuneration" of each of the associated employers. If one of the associated employers is also a multiple accounts employer, the "Gross Total Ontario Remuneration" (total of column B of the Multiple Accounts Schedule) must be entered for that employer.

Note an associated employer with a permanent establishment in Ontario and no Ontario payroll must write zero in this column and give reasons; e.g., holding company.

COLUMN C: Enter the number of days that each employer had Ontario remuneration and a permanent establishment in Ontario.

COLUMN D: Divide each number in column C by 365 and multiply the result by the total exemption available for the year ($400,000). This will give the maximum exemption available to each employer.

COLUMN E: Transfer the value from the account with the largest number in column D to the "Total Available Exemption Amount" at the bottom of column E. From this amount, allocate an exemption amount to each employer in the group. The amount for any specific employer in the group cannot exceed the amount in column B or D that corresponds to that employer. An associated employer with a single EHT account should enter its allocated exemption amount from column E on line 2 of its Annual Return. An associated employer with multiple EHT accounts should enter its allocated exemption amount from column E as the "Total" of column C of Schedule 1 (found on the reverse of the annual return).

COLUMN F: Subtract column E from column B and enter the result in column F.

COLUMN G: An authorized officer for each employer within the associated group must sign this column to authorize the exemption amount allocated to each of them.

Enquiries

For enquiries regarding this guide, please contact any Ontario Ministry of Revenue Tax Office.

General Information

For general information, please refer to the Guide for Employers and Information Bulletins that are available at all Ministry of Revenue tax offices or any of the following:

• Toll-free 1 866 ONT-TAXS (1 866 668-8297)
• Teletypewriter (TTY) 1 800 263-7776
• Website ontario.ca/revenue

© Queen's Printer for Ontario, 2004

ISBN 0-7794-7438-4